Kenai has an experienced management team which have managed all sizes of mining operations in a number of locations around the world. Kenai is operating in the world renowned areas of the Tapajos Gold region in Brazil and Oregon and Nevada in the USA
n Brazil Kenai has executed an Option Agreement with Gold Anomaly Limited (ASX:GOA) for Kenai to acquire the Sao Chico gold project in Brazil, by fu
nding project exploration. The investment is first a loan which has an option that converts the loan to equity in stages of 50% then 75% then potentially 100%. The Tapajós gold region is situated in the south-central part of the vast Amazon Craton, which is divided into two, the Guyana Shield north of the Amazon River and the Brazilian Shield, with its nucleus as the Archaean greenstone-granitoid terrane, south of the Amazon. As shown in the appended regional geology plan, Sao Chico is in the same geological unit, the intrusive Parauari Suite, as the Tocantinzinho (TZ), Palito and Sao Domingo projects. TZ is a major gold project acquired for CAD$122 million in July 2010 by Eldorado Gold (TSX:ELD, ASX:EAU). In June 2010, ELD acquired 26.8% equity in Serabi Mining plc, the AIM-listed company which owns 100% of the Palito underground mine. From Sao Chico, the TZ project is 54 kilometres north-west and Palito is 23 kilometres east north. Kenai’s objectives in this transaction are to undertake local and regional exploration and development, over the tenement area covering 1,416 hectares, initially targeting one million gold ounces in the 56 hectare core area, the site of extensive prior garimpeiro surface workings. Kenai’s project funding is to generate the necessary data to accelerate a Mining Lease application. Current plans are for delivery during October of a 100 tonnes per day capacity, integrated gravity processing plant, which will allow commencement of the GUIA trial mining at the permit rate of 50,000 tonnes per annum by year end. From its due diligence investigations, Kenai considers there is excellent potential at Sao Chico for delineation of NI 43-101 mineral resources of sufficient tonnage and grade to support a substantial gold project operation. An independent NI 43-101 report is currently being prepared for the project. In the US the Company it is focussing on advancing its Hope Butte and Quartz Mountain exploration projects in Oregon. The Hope Butte gold project includes 173 unpatented claims where Chevron Resources Company conducted initial exploration work on the project between 1985 and 1991. Chevron estimated a resource of 8 million tons of mineralized material with a grade of 0.94 grams gold per ton using a cut-off of 0.5 grams per ton. Horizon Resources drilled an additional 73 holes and using data from 114 holes estimated a tonnage of 5 million tons grading 0.91 grams gold per ton using the same cut-off. The Company is currently undertaking a 13 hole drill program to a review of the potential of the property including the identification of high grade gold feeder zone intercepts, as earlier encountered, which may hold the potential for development of an underground development mineral resource. The Quartz Mountain Project (formerly called the Jessie Page Project) is in Malheur County in south-eastern Oregon. A NI 43-101 compliant resource estimate based on 169 verified drill holes from a total of 175, encompassing 18,938.2 meters of drilling was completed in the 1980’s by Chevron Minerals and MK Gold Company. The Indicated resource of 15.0 million tonnes has gold-equivalent values of 352,677 ounces gold at an average grade equivalent of 0.80 g/t gold obtained by converting the silver to gold values using a ratio of 49.5:1 silver to gold. Metallurgical recoveries were not considered and the highest assays in the database are 14.95 g/t gold plus 106.3 g/t silver. An apparent high-grade feeder zone has been intersected in several historical drill holes. Assays on secondary minerals show anomalous values for As, Sb, and Hg indicative of a deep feeder system. The property has the potential
for a higher-grade feeder zone that is largely unexplored, and several secondary targets that require further work. There is the potential to significantly expand the existing resource base at Quartz Mountain. On March 19, 2010 Kenai reached an agreement with Western Energy Development Corp. (“Western”), a wholly-owned subsidiary of Western Uranium Corporation (TSX-V: WUC), to participate in exploring the Albisu gold property located at the northern end of the King’s Valley
in north-western Nevada, approximately 35 km west of McDermitt, at the Nevada/Oregon border. The agreement was approved by the TSX Venture Exchange in May 2010.
